In just five months, since "Obamacare" became U.S. law, Oregon has established itself as the state to watch. With a waiver from the feds that frees providers from the traditional fee-for-service payment structure, the state is on a mission to drastically reduce healthcare costs at the same time as delivering healthcare to many more people.

"The nation is watching us, which is both gratifying and sometimes terrifying," said Bruce Goldberg, director of Oregon Health Authority, at a meeting organized by healthcare provider Familycare.

"If we can create a better healthcare system at a cost we can afford, that's what everyone wants for our entire healthcare system."

So howwillthe new law affect us? The goal of the law is to make sure everyone has healthcare coverage. But the program will roll out in stages.

Sen. Laurie Monnes Anderson, right, discusses preventive care with a former high-needs patient whose health problems are now under control with better preventive care

The state reached its first major milestone, Aug. 1, with the certification of eight Coordinated Care Organizations. Five more will be certified Sept. 1. The CCOs will deliver healthcare services across the state, first to the 650,000 adults and children insured through the Oregon Health Plan. The CCOs were set up to serve Medicaid patients, but in future years they may also be opened up to other people seeking health insurance through the Oregon health care exchange.

"How do we promote better health for people on the Oregon Health Plan? How do we create a better health care experience for everyone who uses –or works in -- the healthcare system? And how do we do that at an affordable level?"

If you're on the Oregon Health Plan you don't have to do anything special. You will automatically be enrolled in the new system, which will include medical, dental and mental health care.

If you're uninsured you will be able to buy insurance on the exchange. By October 2013, uninsured people and small businesses will be able to shop on the new health exchange for care plans that will start in 2014. And the plan will be open to larger businesses by 2016.

Cutting Costs while Expanding Services Oregon received a waiver to opt out of the national Medicaid and Medicare system. Instead, the state asked health providers to form CCOs and figure out a better system. CCOs are not tied to the traditional fee-for-service payments, so providers will have freedom to work together to cover patient needs in whichever way works best.

The federal government has a major stake in the outcome because they pay 65 percent of Medicaid and Medicare bills, Goldberg said. And they plan to give Oregon $1.9 billion over the next five years to launch the new system.

A meeting of health professionals came together Aug. 4, to celebrate the certification of FamilyCare as one of the first Coordinated Care Organizations in Oregon. Healthcare professionals had many questions about how the new system will affect them.

"They are doing that because we believe that we can save them that money and then some," Goldberg said. "After paying back the $2 billion, we believe we can save $9 billion over 10 years."

Too Many Specialists and Not Enough Primary Care Jeff Heatherington is the CEO of FamilyCare, one of the first CCOs to be certified. He points out that the United States spends 18 cents in every dollar on healthcare. That's not affordable, he said, especially as America ranks 39th in health outcomes, and the countries that do better also spend far less.

Heatherington said one problem is that too few medical providers choose to offer basic care services. Most choose to become specialists because it pays more. That has to change, he said.

"The truth of the matter is that some people are not going to make as much revenue as before," he said. "We have an overabundance of specialists, and we don't need as many as we have today. We need a system where at least 50 percent of practitioners out there are in primary care."

Community-Based Health Workers Support Prevention Efforts Studies have shown that a small proportion of healthcare users account for the bulk of healthcare costs. These high-need patients use Emergency Rooms, and other services, because of chronic health problems such as: asthma, diabetes, heart disease, mental illness and alcohol and drug addiction. About 25 percent of patients enrolled in the Oregon Health Plan account for 83 percent of its costs.

If we want to cut costs, we have to do a better job of prevention, Heatherington said.

That's behind a move for CCOs to hire community-based health workers. Community-based health workers are not trained as doctors or nurses, but have expertise and cultural competence with specific communities. Trained to deliver important health messages, they will work with high-need patients to prevent problems. Asthma, for example, is a serious illness that can send children to the emergency room over and over. Yet with good preventive care, it can be brought under control – improving the children's health dramatically and also cutting costs.